Over the past half-century, an ounce of gold has, on average, cost 21 times the price of a barrel of oil. Photo: Reuters/file
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Over the past half-century, an ounce of gold has, on average, cost 21 times the price of a barrel of oil. Photo: Reuters/file
Gold’s powerful rally took on fresh legs on Friday, with prices just cents away from $3,600 per ounce, as weak US jobs data further raised expectations for bullion-supportive Federal Reserve rate cuts.
Spot gold was up 1.4 percent at $3,596.55 per ounce, as of 2:47 p.m. EDT (1847 GMT), having hit a record $3,599.89 earlier. The metal is now on track for its strongest weekly gain in nearly four months. US gold futures for December delivery settled 1.3 percent higher at $3,653.30.
For all latest news, follow The Daily Star’s Google News channel. Bullion has surged 37 percent so far this year after a 27 percent gain in 2024 – driven by US dollar weakness, central bank buying, a softening monetary policy backdrop and wider geopolitical and economic uncertainty.
Data showed US job growth weakened sharply in August while the unemployment rate increased to 4.3 percent, confirming that labour market conditions were softening. Traders are now betting an 90 percent chance of a 25-basis-point rate cut and a 10 percent chance of a 50 basis- point cut in September.
“Gold makes new highs; bulls are looking at the clearly weakening trend of employment translating into multiple rate cuts,” said Tai Wong, an independent metals trader.
“The outlook is undoubtedly bullish for gold as labour concerns override inflation for the short, probably medium term. However, I think we are still too far away from 4,000 unless there is a massive dislocation,” Wong added.
Analysts have also flagged the independence of the Fed as a key factor in shaping gold’s trajectory – an issue thrust into the spotlight after US President Donald Trump attempted to fire Fed Governor Lisa Cook and put repeated pressure on the central bank to slash rates.
Bullion, which does not pay interest, tends to shine when rates are low and uncertainty is high, making it a go-to asset for investors seeking safety.
China and India are top gold consumers. Physical demand for gold in these hubs dropped this week due to record high prices.
August gold in reserves data from China’s central bank, due on Sunday, will not catch the September record highs, but may still provide more clarity on how demand from central banks was being affected by high bullion prices.